Which Economic Sectors Influence Average Household Income? A Spatial Econometric Study of Thailand’s 76 Provinces

Abstract

This study investigates the impact of various economic sectors on household income in Thailand. It is conducted in light of the substantial “digital wallet” scheme initiated by the Thai government, with the goal of providing empirical evidence and suggesting alternative policies for regional development informed by sectoral and spatial insights. The research aims to deepen the understanding of how different economic sectors affect household income, filling a gap in the current understanding of the relationship between sectoral productivity and income. Utilising spatial lag models (SLM), the study analyses data spanning from 2005 to 2021, testing the effects of 19 economic sectors comprising the Gross Provincial Product (GPP) of Thailand’s 76 provinces on the average household income. The findings indicate direct associations between agriculture, real estate, professional services, support services, and leisure sectors and household income, alongside pronounced spatial autoregression. This implies that income levels in one province can substantially influence those in neighbouring provinces. This research extends the understanding of economic influences at the regional level and highlights the importance of considering spatial factors in economic policymaking.